Exploratory factor analysis of skills requirement for PPP contract governance

The purpose of this paper is to explore the skills required for effective contract management of public–private partnership (PPP) projects over their contract duration. The growing body of literature indicating the lack of expertise in managing PPP-related projects within the public sector prompted this study.

The study, being an exploratory one, relied on a survey of 207 survey responses from a sample of PPP experts across the globe. The data from the survey are a rich mix of responses from public policy experts, construction professionals, project finance experts, lawyers and academic researchers in PPP.

It was found through exploratory factor analysis that project management, financial engineering, negotiations, risk management, forecasting, stakeholder management and technical skills were very critical for successful contract management of PPP projects. It was also found that regional characteristics influence skills prioritisation.

The results of this study can be validated on larger data sets in specific countries and across regions, sectors and variety of PPP projects. Currently, the authors conducted a general survey using convenience sampling.

The results send a clear signal to practitioners that infrastructure regulation training programs cannot be generalised. Training should be tailored to reflect regional and country-specific characteristics.

The increasing failures and remunicipalisations of privately financed infrastructures is a cause for concern. Little attention has been given to the complicity of PPP regulatory institutions responsible for contract governance of such projects. Studies are increasingly pointing to the absence of critical PPP skills among institutions responsible for managing PPP contracts. This lack of capacity has resulted in poor oversight of private companies providing public services resulting in poor services, and financial recklessness which threaten the sustainability of service provision.